Watch our second episode of short explainer videos with Pavlina Spasovska about the EU Battery Regulation. Get an in-depth understanding of this comprehensive framework that covers the entire battery life cycle and applies to all types of batteries sold in the EU. Discover the main goals of the regulation, the data required for the battery passport, and which companies should be concerned with its requirements. Learn about the steps battery market players can take to ensure compliance, including regulatory assessment and awareness creation. Also, find out why testing or piloting digital battery passports is crucial.
Our videos aim to keep you updated on the latest advancements in battery industry regulation and technology and enable you to comprehend the changes you can initiate now to be fully compliant and prepared for the future. Remember to follow our YouTube channel for updates and watch out for our upcoming episode about the Inflation Reduction Act.
What is the EU Battery Regulation?
As part of the EU Green Deal and building on the Strategic Action Plan on Batteries, the European Commission proposed a new regulation on batteries and waste batteries in December 2020.
The EU Battery Regulation is a comprehensive framework that covers the entire battery life cycle, from cradle to end-of-life, and applies to all types of batteries sold in the EU. The regulation aims to strengthen the functioning of the internal market, promote a circular economy, and reduce environmental and social impacts throughout all stages of the battery life cycle. It establishes requirements for sustainability, safety, and labeling of batteries as well as requirements for end-of-life.
The regulation also requires economic operators placing batteries on the EU market (except for SMEs) to develop and implement a "due diligence policy" consistent with international standards to address social and environmental risks linked to sourcing, processing, and disposal of batteries.
What are the main goals of the EU Battery Regulation?
The EU Battery Regulation introduces mandatory requirements on sustainability, such as carbon footprint rules, minimum recycled content, performance, and labeling. The regulation defines mandatory requirements for all batteries placed on the EU market.
Each economic operator placing a battery on the market which belongs to any of the following categories: EV, LMT or industrial batteries with internal storage above 2kWh will require a battery passport which should be accessible via a QR code on the battery. The Battery passport will have to contain the key data about the battery that can benefit the owners but also the EoL operators and entities handling the batteries. In order to enable this input will be required from along the whole battery supply chain including: input from:
- Cell producers
- Module producers
- Battery producers
- Automotive OEMs
- Battery service, refurbishing, and repurposing companies
What data should the Battery passport contain?
Two levels of information should be part of the battery passport: 1) battery model information and individual battery specific information that comes out of the use of the battery. In general this will include details on:
- Identification of the battery and Manufacturer details
- Material composition and chemistry details
- Performance and durability values
- Safety measures and more details composition information including dismantling
- Battery status, State of Health (SoH) and usage data
as well as information on sustainability requirements such as the carbon footprint declaration, due diligence information on responsible sourcing and ESG details.
The overall goal is to enable more up-to-date information for
remanufacturers, second-life operators and recyclers so that they would be able to treat the batteries in the most efficient way and contribute to the battery circularity concept; but also enable industry benchmarking over time that would create for a more competitive market.
What companies should be concerned?
Companies that operate with batteries, including manufacturers, importeds, and distributors are directly concerned with the regulations’ requirements with their suppliers being indirectly affected as certain obligations require information from the whole supply chain including very upstream supply chain points. This in particular refers to the due diligence obligations and carbon footprint details.
For instance, companies or economic operators placing batteries on the market will need to report in their annual due diligence report on the details for sourcing four critical minerals (lithium, nickel, cobalt and natural graphite and their compounds) including place of origin, content and type of materials including market transactions. What this means is that economic operators who place the battery on the market will need to have deeper knowledge on their suppliers beyond Tier 1 in order and through collaborative approaches build or establish chain of custody or traceability to obtain this information. In the long run, if some of your suppliers are not providing the needed information companies will need to turn around to alternative suppliers or materials that contribute or support with obtaining these regulatory details. With the current challenges that downstream companies are having on their supply chain mapping this is potentially one of the reasons as to why so many downstream companies are announcing and working towards strategic moves, partnership including vertical integrations for both securing materials but also being able to better comply and have a more reliable supplier network.
How can battery market players ensure they comply with regulation?
The first step to ensuring compliance is to create awareness and get familiar with the regulatory requirements. That is why gaining deeper insights and digesting into what is needed is the first step.
The second part consists of doing a regulatory assessment as a way to compare what is the current status of their battery activities compared with the requirements and upcoming obligations. This will lead companies to gain visibility in the existing gaps and be able to create a roadmap on how to tackle this different gaps within the period of compliance requirements. As the regulatory obligations will be introduced gradually after the adoption date, with careful planning companies will have enough time to address any existing gaps or inconsistencies and align their systems.
This might include supply chain reorganization or implementing new ways of communication and it is something that with proper guidance it can definitely be achieved. The next step would be to test or pilot how the digital battery passport requirements can work in a specific company context.
For example, If you are an EV battery manufacturer or industrial battery producer you can pilot or test a battery passport solution and be one step further by seeing how these data requirements can fit in or e=integrate with your legacy systems. As companies today use vast sources of different softwares of solutions, being able to understand and seamlessly integrate this with battery passports can significantly make the process more efficient.
Overall, a proactive approach where engaging in collaboration with the right parties which can provide not only the technological aspects of compliance but also advise on and use the network benefits from a wider supply chain collaboration is another way how companies can analyze where they stand, what they need to be compliant with and how to prepare and act towards it.
Our explanation videos are designed specifically for you to find out what changes you can make today to be fully compliant and ready for the future. Check out our next episodes and learn more about regulations, requirements, and technologies!